NEW HAVEN, Conn.--(BUSINESS WIRE)--Today Avangrid, Inc. (NYSE:AGR) reported consolidated net income of $630
million, or $2.04 per share, for the year ended December 31, 2016,
compared to $267 million, or $1.05 per share, for the year ended
December 31, 2015. For the fourth quarter of 2016, consolidated net
income was $207 million, or $0.67 per share, compared to $96 million, or
$0.37 per share, for the same period in 2015. These results include full
year and fourth quarter 2015 earnings for Avangrid (formerly known as
Iberdrola USA, Inc.) and earnings from December 17, 2015 through the end
of 2015 for UIL Holdings Corporation (UIL).

Net income and earnings per share for the fourth quarter and full year
of 2016 and 2015 on a U.S. GAAP basis are set forth below:

Net Income (Loss) - $M

Three Months ended December 31,

Year ended December 31,

$M

2016

2015

'16 vs '15

2016

2015

'16 vs '15

Networks

$ 161

$ 23

$ 137

$ 480

$ 208

$ 271

Renewables

(9)

(23)

14

112

133

(21)

Corporate

51

113

(62)

80

(6)

86

Gas Storage

4

(18)

22

(42)

(69)

27

Net Income

$ 207

$ 96

$ 111

$ 630

$ 267

$ 363

Earnings (Loss) Per Share

Three Months ended December 31,

Year ended December 31,

2016

2015

'16 vs '15

2016

2015

16 vs '15

Networks

$ 0.52

$ 0.09

$ 0.43

$ 1.55

$ 0.83

$ 0.72

Renewables

(0.03)

(0.10)

0.07

0.37

0.53

(0.16)

Corporate

0.16

0.45

(0.29)

0.26

(0.03)

0.29

Gas Storage

0.01

(0.07)

0.08

(0.14)

(0.28)

0.14

Earnings Per Share

$ 0.67

$ 0.37

$ 0.30

$ 2.04

$ 1.05

$ 1.00

Weighted-avg # of Shares (M):

309.5

252.2

309.5

252.2

Amounts may not add due to rounding

Adjusted to reflect the combination of the full year of Avangrid with
UIL for 2015, excluding merger-related costs in 2015, the gain from the
sale of equity investments, the impairment of an investment recorded in
2016, mark-to-market adjustments in the Renewables segment and the
non-core Gas Storage business, the non-GAAP 2016 consolidated adjusted
net income was $641 million, or $2.07 per share, for the year ended
December 31, 2016, compared to $521 million, or $1.68 per share, for the
year ended December 31, 2015. For the fourth quarter of 2016, the
non-GAAP consolidated adjusted net income was $206 million, or $0.67 per
share, compared to $207 million, or $0.67 per share, for the same period
in 2015. For additional information, see “Use of Non-GAAP Financial
Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

“It’s been a little over a year since the merger of Iberdrola USA/UIL
Holdings and 2016 was clearly a very productive first year,” said James
P. Torgerson, chief executive officer of Avangrid. “Integration of the
companies is proceeding as planned and the implementation of best
practices is well underway. Our financial performance and cash flow
significantly improved in 2016 helping us to fund our growth strategy as
we invested $1.9 billion of capital in Networks and Renewables in 2016.
The Renewables Safe Harbor and Repowering opportunities in 2016 enabled
us to secure the full value of production tax credits for up to 2 GW of
new wind. Earnings improved in part due to the execution of our
regulatory strategy with further investment, rate base growth and the
achievement of constructive rate agreements in 2016.”

“Those rate agreements, along with annual FERC transmission true-ups,
provide stability on approximately 80% of our utility rate base in the
coming years. In December, we also filed our Automated Metering
infrastructure proposal associated with New York’s Reforming the Energy
Vision initiative and our Earning Adjustment Mechanism implementation
petition, each of which will provide opportunities for us to help
customers use energy more efficiently and help the state meet its energy
goals,” added Torgerson.

Avangrid Networks

Avangrid Networks earned $480 million, or $1.55 per share, in 2016
compared to $208 million, or $0.83 per share, in 2015. Avangrid Networks
earned $161 million, or $0.52 per share, in the fourth quarter of 2016,
compared to $23 million, or $0.09 per share, in the fourth quarter of
2015. Earnings for the full year and fourth quarter of 2016, compared to
2015 benefitted primarily from improved revenues with growing rate base,
the impacts from rate agreements in 2016 and cost management across all
of Networks.

The Avangrid Networks results for the full year and fourth quarter of
2015 only reflect earnings from UIL from December 17, 2015 through year
end of 2015, and, as a result 2015 results are not directly comparable
to 2016 results. Adjusted to reflect the combination of Avangrid with
UIL for the full year and fourth quarter of 2015, Avangrid Networks
earned $381 million and $99 million, respectively.

Avangrid Renewables

Avangrid Renewables earned $112 million, or $0.37 per share, in 2016
compared to $133 million, or $0.53 per share, in 2015. The results in
2015 were favorably impacted by certain transactions that had no effect
on consolidated results. Those transactions included the settlement of
intercompany interest and the settlement of an intercompany note with
Corporate in the amount of $0.13 per share. Earnings in 2016, compared
to 2015 reflected the positive impacts from the extension of useful life
of certain wind assets, improved wind production and favorable
mark-to-market adjustments.

“Earlier this month, the Amazon Wind Farm US East, the first
commercial-scale wind farm in North Carolina and one of the first in the
southeastern U.S., reached full commercial operation,” commented
Torgerson. “Execution of additional wind and solar projects totaling
nearly 600 MWs is well underway with commercial operation expected in
late 2017.”

Avangrid Renewables incurred a loss of $9 million, or $0.03 per share,
in the fourth quarter of 2016, compared to a loss of $23 million, or
$0.10 per share, in the fourth quarter of 2015. Earnings for the fourth
quarter of 2016, compared to 2015 benefitted from the extension of
useful life of certain wind assets, higher average prices and favorable
mark-to-market adjustments.

Corporate

Corporate contributed $80 million, or $0.26 per share, compared to a
loss $6 million, or $0.03 per share, in 2015. Results for the full year
of 2015 include certain merger-related costs and losses from the
intercompany transactions with Renewables described above, partially
offset by favorable income tax adjustments primarily related to the
application of a unitary tax regime in certain states. Results in 2016
compared to 2015, reflect the gains from the sale of Iroquois and other
equity investments and favorable state income tax adjustments.

For the fourth quarter of 2016, Corporate contributed $51 million, or
$0.16 per share, compared to $113 million, or $0.45 per share, for the
fourth quarter of 2015. Results for the fourth quarter of 2015 include
favorable tax adjustments primarily related to the application of a
unitary tax regime in certain states, partially offset by certain
merger-related costs. Results for the fourth quarter of 2016 compared to
2015 reflect less favorable tax adjustments mainly in relation to the
application of a unitary tax regime in certain states.

The Corporate results for the full year and fourth quarter of 2015 only
reflect earnings from UIL from December 17, 2015 through year end of
2015, and, as a result 2015 results are not directly comparable to 2016
results. Adjusted to reflect the combination of AVANGRID with UIL for
the full year and fourth quarter of 2015, Corporate contributed $23
million and $131 million, respectively.

Gas Storage

Gas Storage incurred a loss of $42 million, or $0.14 per share, in 2016
compared to a loss of $69 million, or $0.28 per share, in 2015. For the
fourth quarter of 2016, Gas Storage earned $4 million, or $0.01 per
share, compared to a loss of $18 million, or $0.07 per share, in the
fourth quarter of 2015.

Avangrid is exploring strategic options for the Gas Storage business and
considers it a non-core business.

Outlook

Avangrid’s adjusted consolidated earnings outlook for 2017 is projected
to be $2.10- $2.35 per share. Details of the earnings components are
summarized as follows.

Outlook - Estimated EPS (1)

As of February 21, 2017

Networks

$1.66 - $1.74

Renewables

$0.50 - $0.65

Corporate

$(0.08) - $(0.05)

Adjusted EPS(2)

$2.10 - $2.35

Amounts may not add due to rounding; Estimates are not expected
to be additive

(1) Assumes approx. 309.5 million shares
outstanding

(2) Excluding Gas Storage and Mark-to-Market
- Renewables

Primary outlook assumptions include:

Full year NYSEG, RG&E and UI-Distribution rates

Further integration & best practices

Normal Wind

Full year Renewables extension of wind assets useful life

Full year Amazon Wind Farm U.S. East

Additional Wind projects by year-end

Higher consolidated effective tax rate

Excludes Renewables mark-to-market and non-core Gas Storage

Although it is not included in our 2017 adjusted consolidated earnings
outlook, the Gas Storage business is projected to be $(0.12)-$(0.08) per
share in 2017.

Webcast

Avangrid will webcast audio-only financial presentations in conjunction
with releasing fourth quarter and full year 2016 earnings on Tuesday,
February 21, 2017 beginning at 10:00 A.M. Eastern time. The webcast will
feature 2016 earnings and long-term outlook presentations from
Avangrid’s CEO, James P. Torgerson and other members of the executive
team. Following the earnings and long-term outlook webcast, Avangrid
will webcast an audio-only Renewables seminar beginning at 12:30 P.M.
Eastern time. Both webcasts can be accessed through the investor
relations section of Avangrid’s website at http://www.Avangrid.com.

Avangrid, Inc. (NYSE: AGR) is a diversified energy and utility
company with more than $30 billion in assets and operations in 25
states. The company operates regulated utilities and electricity
generation through two primary lines of business. Avangrid Networks
includes eight electric and natural gas utilities, serving approximately
3.2 million customers in New York and New England. Avangrid Renewables
operates 6.5 gigawatts of electricity capacity, primarily through wind
power, in states across the United States. Avangrid employs
approximately 7,000 people. The company was formed through a merger
between Iberdrola USA, Inc. and UIL Holdings Corporation in 2015.
Iberdrola S.A. (Madrid: IBE), a worldwide leader in the energy industry,
owns 81.5% of the outstanding shares of Avangrid common stock. For more
information, visit www.Avangrid.com.

Forward Looking Statements

Certain statements in this presentation may relate to our future
business and financial performance and future events or developments
involving us and our subsidiaries that are not purely historical and may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of forward-looking terms such as
“may,” “will,” “should,” “can,” “expects,” “believes,” “anticipates,”
“intends,” “plans,” “estimates,” “projects,” “assumes,” “guides,”
“targets,” “forecasts,” “is confident that” and “seeks” or the negative
of such terms or other variations on such terms or comparable
terminology. Such forward looking statements include, but are not
limited to, statements about our plans, objectives and intentions,
outlooks or expectations for earnings, revenues, expenses or other
future financial or business performance, strategies or expectations, or
the impact of legal or regulatory matters on our business, results of
operations or financial condition. Such statements are based upon the
current beliefs and expectations of our management and are subject to
significant risks and uncertainties that could cause actual outcomes and
results to differ materially. Important factors that could cause actual
results to differ materially from those indicated by such
forward-looking statements include, without limitation, the risks and
uncertainties set forth under the section entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in our Annual Report on Form 10-K for the year ended
December 31, 2015, and our Quarterly Report on Form 10-Q for the nine
months ended September 30,2016, which are on file with the Securities
and Exchange Commission (SEC) and available on our investor relations
website at www.Avangrid.com
and on the SEC website at www.sec.gov.
Additional information will also be set forth in subsequent filings with
the SEC. You should consider these factors carefully in evaluating
for-ward looking statements. Should one or more of these risks or
uncertainties materialize, or should any of the underlying assumptions
prove incorrect, actual results may vary in material respects from those
expressed or implied by these forward-looking statements. You should not
place undue reliance on these forward-looking statements. We do not
undertake any obligation to update or revise any forward-looking
statements to reflect events or circumstances after the date of this
presentation whether as a result of new information, future events or
otherwise, except as may be required under applicable securities laws.

Use of Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in
accordance with U.S. GAAP, Avangrid considers certain non-GAAP financial
measures that are not prepared in accordance with U.S. GAAP, including
adjusted net income and adjusted earnings per share. The non-GAAP
financial measures we use are specific to Avangrid and the non-GAAP
financial measures of other companies may not be calculated in the same
manner. We use these non-GAAP financial measures, in addition to U.S.
GAAP measures, to establish operating budgets and operational goals to
manage and monitor our business, evaluate our operating and financial
performance and to compare such performance to prior periods and to the
performance of our competitors. We believe that presenting such non-GAAP
financial measures is useful because such measures can be used to
analyze and compare profitability between companies and industries
because it eliminates the impact of financing and certain non-cash
charges as well as allow for an evaluation of Avangrid with a focus on
the performance of its core operations.In addition, we present
non-GAAP financial measures because we believe that they and other
similar measures are widely used by certain investors, securities
analysts and other interested parties as supplemental measures of
performance.

We provide adjusted net income and adjusted earnings per share, which
are adjusted to reflect the full twelve month period of results for UIL,
excluding the costs of the combination of Avangrid with UIL,mark-to-market
adjustments to reflect the effect of mark-to-market changes in the fair
value of derivative instruments used by Avangrid to economically hedge
market price fluctuations in related underlying physical transactions
for the purchase and sale of electricity, adjustments for the non-core
Gas Storage business, for which we are exploring strategic options, and
the impairment of certain investments and excludes the sale of certain
equity investments. We believe adjusted net income is more useful in
understanding and evaluating actual and projected financial performance
and contribution of Avangrid core lines of business and to more fully
compare and explain our results.The most directly comparable
U.S. GAAP measure to adjusted net income is net income. We also provide
adjusted earnings per share, which is adjusted net income converted to
an earnings per share amount.

The use of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
Avangrid’s U.S. GAAP financial information, and investors are cautioned
that the non-GAAP financial measures are limited in their usefulness,
may be unique to Avangrid, and should be considered only as a supplement
to Avangrid’s U.S. GAAP financial measures. The non-GAAP financial
measures may not be comparable to other similarly titled measures of
other companies and have limitations as analytical tools. Non-GAAP
financial measures are not primary measurements of our performance under
U.S. GAAP and should not be considered as alternatives to operating
income, net income or any other performance measures determined in
accordance with U.S. GAAP.

Avangrid, Inc.

Condensed Consolidated Statements of Income

(In Millions except per share amounts)

(Unaudited)

Three Months ended

Year ended

December 31,

December 31,

2016

2015

2016

2015

Operating Revenues

$ 1,491

$ 1,153

$ 6,018

$ 4,367

Operating Expenses

Purchased power, natural gas and fuel used

325

218

1,286

972

Operations and maintenance

544

573

2,206

1,808

Impairment of non-current assets

-

2

-

12

Depreciation and amortization

183

170

804

695

Taxes other than income taxes

133

107

528

367

Total Operating Expenses

1,185

1,070

4,824

3,854

Operating Income

306

83

1,194

513

Other Income and (Expense)

Other income and (expense)

4

17

76

55

Earnings (losses) from equity method investments

3

3

7

-

Interest expense, net of capitalization

(56)

(76)

(268)

(267)

Income (Loss) Before Income Tax

257

27

1,009

301

Income tax expense

50

(69)

379

34

Net Income (Loss)

$ 207

$ 96

$ 630

$ 267

Earnings (Loss) per Common Share, Basic:

$ 0.67

$ 0.37

$ 2.04

$ 1.05

Earnings (Loss) per Common Share, Diluted:

$ 0.67

$ 0.37

$ 2.04

$ 1.05

Weighted-average Number of Common Shares Outstanding:

Basic

309,492,628

261,570,425

309,512,553

254,588,212

Diluted

309,974,117

261,637,469

309,817,322

254,605,111

Amounts may not add due to rounding

Avangrid, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

December 31,

December 31,

($M)

2016

2015

ASSETS

Current assets

$ 2,252

$ 2,474

Net property, plant & equipment in service

20,077

19,373

Total property, plant & equipment

21,548

20,711

Regulatory assets

3,091

3,314

Goodwill

3,124

3,115

Other assets

1,294

1,129

Total Assets

$ 31,309

$ 30,743

LIABILITIES AND EQUITY

Current liabilities

2,712

2,035

Regulatory liabilities

2,246

2,360

Other non-current liabilities

6,719

6,752

Non-current debt

4,510

4,530

Total Liabilities

16,187

15,677

EQUITY

Common stock

3

3

Additional paid-in-capital

13,653

13,653

Treasury stock

(5)

-

Retained earnings

1,544

1,449

Accumulated other comprehensive loss

(86)

(52)

Total Stockholders' Equity

15,109

15,053

Noncontrolling interests

13

13

Total Equity

15,122

15,066

Total Liabilities & Equity

$ 31,309

$ 30,743

Amounts may not add due to rounding

Avangrid, Inc.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

Year Ended

December 31,

$M

2016

2015

Cash Flow from Operating Activities:

Net income

$ 630

$ 267

Net Cash Provided by Operating Activities

1,561

1,363

Cash Flow from Investing Activities:

Capital expenditures

(1,707)

(1,082)

Contributions in aid of construction

69

38

Government grants

—

17

Acquisition of business, net of $48 million cash acquired

—

(547)

Proceeds from sale of equity method and other investment

57

3

Proceeds from sale of property, plant and equipment

50

—

Receipts from (payments to) affiliates

6

(6)

Cash distribution from equity method investments

6

12

Other investments and equity method investments, net

(8)

47

Net Cash Used in Investing Activities

(1,527)

(1,518)

Cash Flow from Financing Activities:

Non-current note issuance

493

350

Repayments of non-current debt

(355)

(141)

Repayments of other short-term debt, net

(2)

10

Payments on tax equity financing arrangements

(88)

(102)

Repayments of capital leases

(12)

(12)

Dividends to noncontrolling interests

—

(3)

Repurchase of common stock

(5)

—

Issuance of common stock

(2)

—

Dividends paid

(401)

—

Net Cash (Used in) Provided by Financing Activities

(372)

102

Net (decrease) in Cash, Cash Equivalents and Restricted Cash

(338)

(53)

Cash, Cash Equivalents and Restricted Cash, beginning of period

434

487

Cash, Cash Equivalents and Restricted Cash, end of period

$ 96

$ 434

Amounts may not add due to rounding

Reconciliation of Non-GAAP Financial Measures

Earnings for the fourth quarter and full year of 2015 are adjusted below
to reflect the combination of AVANGRID with UIL:

Avangrid, Inc.

Reconciliation of Non-GAAP Adjusted Net Income (Loss) - $M

(Unaudited)

Three Months ended December 31,

Year ended December 31,

2016

Adjusted 2015

Adjusted'16 vs '15

2016

Adjusted 2015

Adjusted'16 vs '15

Networks

$ 161

$ 23

$ 137

$ 480

$ 208

$ 271

Renewables

(9)

(23)

14

112

133

(21)

Corporate

51

113

(62)

80

(6)

86

Gas Storage

4

(18)

22

(42)

(69)

27

Net Income

$ 207

$ 96

$ 111

$ 630

$ 267

$ 363

Adjustments:

Net income representing full year for UIL

-

44

(44)

-

133

(133)

Merger Costs

-

90

(90)

-

122

(122)

Sale of equity method and other investment

-

-

-

(36)

-

(36)

Impairment of investment

-

-

-

3

-

3

Mark-to-market adjustments - Renewables

5

-

5

(20)

(25)

5

Income tax impact of adjustments*

(2)

(41)

39

22

(45)

67

Gas Storage, net of tax

(4)

18

(22)

42

69

(27)

Adjusted Net Income

$ 206

$ 207

$ (1)

$ 641

$ 521

$ 120

* 2016: Income tax impact of adjustments: $14M from sale of
equity method investment-Corporate,$1M from sale of
other investment - Renewables , $(1)M on impairment of
investment-Networksand $8M from MtM
adjustment-Renewables.